An Interview with Oscar Boruchin

Owner of Licenciados and 8-9-8 Collection cigars.

Oscar Boruchin owns some of the most sought-after
brands in the United States today: Licenciados and the 8-9-8
Collection. Boruchin, 63, has built those brands over the last 15
years since he left a job with General Cigar Co. to become a
part owner of Mike's Cigars, a cigar shop institution. Today, Boruchin
is the sole proprietor of the business, which includes not only his
brands, but a large wholesale and mail-order operation and a
world-class retail store in the exclusive Bal Harbour area of Miami
Beach.

Boruchin's story is a true rags to riches tale. He fled Cuba after
the family business was nationalized in 1960, arriving in Miami
"virtually penniless." He began driving a cab, scrambling to support
his family. His association with the cigar business began when a
customer, a Cuban exile fresh off the plane, paid his cab fare
with cigars, the only possession of value Fidel Castro allowed his
countrymen to take out of the country.

Boruchin has a rare vantage point in the cigar
industry. He is a brand owner, a wholesale supplier of other retailers
and a retailer. He has seen a small, profitable business grow into a
$22 million-plus enterprise in the space of four years. And,
he's recently opened a spacious new store, confident that the cigar
business will remain strong. Marvin R. Shanken, editor and publisher
of Cigar Aficionado, discussed all aspects of the cigar business with
Boruchin in a wide-ranging interview.

Cigar Aficionado: You are a
Cuban-American. Tell us about your life before coming to America.

Boruchin: My father and mother were born in
Russia. They came to Cuba thinking that they would be able to go on to
America--pretty quick. But after three or four years in Cuba, when
they finally had the opportunity to come to the United States, they
felt that the Cuban people were so nice, and that they were making a
living. They decided to stay.

CA: What year was that?

Boruchin: My father came in 1923 and my mother
came in 1926. He left her behind in Europe--she was his
girlfriend--and then he brought her to Cuba and married her. So it was
the late 1920s. I was born in Havana in 1933. My father owned a little
store in the country for a long time. I went to school in Havana.

CA: Your father had a retail store?

Boruchin: My father had a general merchandise
store in a little town called Calimete. Calimete is in the Matanzas
province, almost on the border with Las Villas. It was about five
hours away from Havana, near a sugar mill.

CA: How old were you and what year was it that
you came to America?

Boruchin: I came to America in 1961. I was 27
years old.

CA: Where did you go to college?

Boruchin: In Havana.

CA: What did you major in?

Boruchin: I didn't major. I married and I
never finished college. I went to work with my father-in-law in the
shoe business. We were big importers of materials to manufacture
shoes. When Castro came in 1959, we were well established. I didn't
leave Cuba because I was persecuted but because my business
died. Importations were not allowed. All the shoe factories were
intervened by the government. I had no way to make a living. Since I
had no way to make a living in that system, I felt it was not one in
which I could progress.

CA: Do you still have family members in Cuba?

Boruchin: Very few. A couple of cousins.

CA: But you were the first in your family to
leave.

Boruchin: I was the first one in my family to
take the jump, in 1961.

CA: What was it like? Did you have difficulty
leaving Cuba to go to America?

Boruchin: I had no difficulty because I always
had an American visa. I used to come very often to the United
States. I would travel here eight to 10 times a year on business or
vacation. So I always had a current visa. For me to leave Cuba in 1961
was very easy. I just picked up a ticket and went to the airport and
left. There was no problem leaving the country, although sometimes you
would be subjected to searches. Because I left the country so often
even before leaving for good, I would just go directly to the security
office, because I knew they would automatically search me.

CA: What were they looking for?

Boruchin: In my case, money. American
money. They wanted to see if I was smuggling money out of the
country. But I never did. When I finally did leave, I left alone. My
family--my wife, Rosita, and my one-year-old daughter--followed a few
days later. You could call it penniless. I had maybe $2,000 in the
United States. My in-laws came a few months later and my parents came
three years after that.

CA: What did you do when you arrived in Miami?
Did you have friends, relatives? How did

you survive?

Boruchin: I had very few friends. I had
nothing to do and very little money. We had an illness in the family
at that time and no insurance because I was just a newcomer. So, the
little money that I brought in disappeared quickly with doctor bills
and stuff like that. I started to drive a taxi, and I was making about
$40 a week for a few months.

CA: Forty dollars a week?

Boruchin: I was driving this car 10, 12 hours
a day and essentially looking for Cuban fares because I didn't speak
English. There was no way I could understand an address in English. I
was going to the airport and waiting for the Cuban planes, which used
to come two times a day. I was trying to take Cuban
passengers. Otherwise, I stayed close to the refugee center in Miami
and other places where Cubans would congregate. It was the easiest way
for me to communicate and take fares. That's the way I got into the
cigar business.

CA: How could you live on $40 a week?

Boruchin: It was 1961, and although $40 a week
wasn't too much money, it was maybe the equivalent of $150 a week
today. We--my father-in-law, mother-in-law, my wife and me and the
baby--were in a one-bedroom apartment in Miami Beach paying $60
rent. We were making a living. We were struggling. It was a big
change, because we had a much nicer life in Cuba. We weren't
multimillionaires. But I was doing well there.

CA: Can you explain how your taxi driver job
led you into the cigar business?

Boruchin: One day, I picked up a Cuban family
at the airport. When we got to the destination, they had no money to
pay me. But they were carrying a box of cigars because Castro let
everybody out of Cuba with one or two boxes. They suggested that I
could collect the fare with a box of cigars. I took it. I didn't know
if I was going to lose money or make money, but I took the box of
cigars for the fare and I went to Miami Beach, to Zelig's on Lincoln
Road. He gave me $10 for that box.

CA: What was it? Do you remember?

Boruchin: Oh, yeah! Montecristo No. 4. Now, I
figured if I could go to the airport and buy the cigars for $9 a box
and manage to buy 10 to 15 boxes a day, I would make more money than
driving a taxi and I wouldn't have to work 12 hours a day. So, I took
a little money and went to the airport. The Cubans arrived without a
penny, and the only thing they had that could be converted into money
was that box of cigars.

CA: What did you pay for a box of cigars?

Boruchin: Nine dollars.

CA: What did you sell it for?

Boruchin: Ten dollars.

CA: You only made a $1 profit on each box?

Boruchin: Don't forget that I was buying 10,
12, sometimes 15 boxes at a time. In my mind, I was thinking $15 a day
would be over $100 a week. That was two and a half times what I was
making driving a taxi. For me, it was tremendous. Within two months,
it de-veloped into a tremendous business. Two months later, I had
people helping me. I was buying a couple of hundred boxes a day. I
didn't have a market in Miami. I came to New York to sell the surplus.

CA: In 1961, what brands were people bringing
with them?

Boruchin: They were bringing Por
Larrañaga Cedros, Romeo y Julieta Churchills and a lot of
H. Upmanns, which was the easiest cigar to get in Cuba at the time.

Boruchin: The Miami market got clogged up. I
couldn't sell anymore. I didn't sell them to Mike [Mersel,
former owner of Mike's Cigars] because he wanted to pay too little
money. But Zelig [Gimelstein] was paying me the $10, also any
size, any box. You can imagine he was making a killing. At one point,
however, he owed me money. He couldn't get rid of the boxes as fast as
I was buying them. It was funny. A lot of people at the airport
distrusted me, and they wouldn't sell me any cigars. I would give them
a card with my telephone number. At first, I did it as a joke, but
within a couple of weeks my wife was spending 20 hours a day answering
the phone from people who wanted me to come pick up the cigars they
hadn't been able to sell.

CA: Was there anything illegal about your
activity?

Boruchin: I don't know. I never checked. I
paid my taxes at the end with my accountant. I don't know if it was
illegal. I don't think it was.

CA: When the glut developed in Miami, you came
to New York with the cigars. Who did you sell them to?

Boruchin: The people who were buying from me
in Miami were shipping the cigars to New York anyway. I found out
about that, and I took a plane up here. I ended up on 86th and
Broadway at a little tobacco shop owned by Mr. Danny Blumenthal
[today, the owner of Villazon].

CA: How did you know that he was a buyer?

Boruchin: Somebody told me about three or four
people in New York, and that he used to advertise Cuban cigars for 60
cents each on a big sign on the wall. So I figured he had a lot of
Cuban cigars. I sat down in his office, and I asked him for $12
a box. He nearly broke my arm shaking it. He never said yes or no, but
he always paid the freight. I shipped him all I could buy. And he
bought. I kidded with him not too long ago that I wanted some of my
cigars back. I was shipping almost an unlimited amount, and he was
selling everything.

CA: But we're talking about hundreds of boxes
that you were basically buying one or two boxes at a time from all the
people that came off the planes. Were there not importers bringing in
large quantities?

Boruchin: No, I was buying them one by one
from the public.

CA: How long did that last?

Boruchin: About seven or eight months, and
then Castro stopped allowing people to bring the boxes of cigars. My
business died immediately.

CA: By now, it must be 1962.

Boruchin: Yes. And I was out of
business. Zelig owed me like $6,000 or $7,000 for cigars.

CA: You must have been doing very well if you
could operate and have some guy owe you that much money.

Boruchin: I was making a few hundred
dollars. I already left the poverty level at that point. I wasn't
poor. So, Zelig had two stores. One of them was located on Lincoln
Road and one on Alton Road inside a drugstore. The owner said to me,
"Now what are you going to do?" I really had no idea, but I knew the
cigar business a little, especially the Cuban end, so he suggested to
me that to pay off his debt to me, I could take over the little store
on Alton Road in Miami Beach. I asked him, How much could I make? He
said, "Oh, you can make, easy, $125 a week. In 1962, $125 a week
wasn't bad. And I would be working on my own. I figured I could do a
little better because that store had an absentee owner. I knew I would
take better care of it. That started the most terrible period of my
life. The store was open from 7 a.m. to 1 at night. We used no
help. So, it was me, my wife and my father-in-law taking care of that
little business without any help. It was a neighborhood store and we
were selling, two, three hundred dollars a day. Cigarettes, candy.

CA: Did you make a $125 a week?

Boruchin: I was able to do better. But, if you
divide that between the hours I was spending in the store, it worked
out to about 30 cents an hour.

CA: What was the name of the store?

Boruchin: The drugstore used to be called the
Hotel Pharmacy, and our store was called the Hotel Pharmacy Tobacco
Shop. It was inside the pharmacy. From there, we acquired another
little store on 5th and Washington, which was the heart of Miami Beach
at the time. It was near the gymnasium where Cassius Clay used to
train before he changed his name to Muhammad Ali. There was some
action there with the Dundee brothers as the promoters. They brought a
lot of big smokers to that area. I had the tobacco stand right under
the gym. We did very well there but we were open 20 hours a day. So,
it was a tremendous stress.

That's when I met the regional sales manager for General
Cigar. They used to call on me because I used to buy a lot of White
Owls and Tiparillos and a lot of brands. This guy liked me, and he
used to say he didn't understand why a young man like me had to be
behind the counter selling cigars to these old people. He said my
future was maybe to work for a cigar company. He felt that if I came
with him and I worked the way he expected me to work, he promised me
that I was going to do very well with the company. He was a big
inspiration for me. His name was Earl Casten. I give him credit for
building General Cigar's business in the South. He offered me a job as
his supermarket man. At that time, many supermarkets sold cigars and
had big displays of cigars. They told me that if I went into a place
that is not a supermarket, I would be fired. My job was strictly to go
into supermarkets and launch the distribution and make sure General
Cigar got the most prominent position.

I had an edge against the other salesmen because I still had my
cigar stand. I used to take the other guys' cigars off the
rack, put General's in and bring the other cigars to my shop. I had no
problem. The other people couldn't do it because they couldn't get rid
of the cigars. I did a hell of a job in supermarkets.

CA: That's a very creative approach to
selling.

Boruchin: Taking the competitor off the shelf?
Yes, it was, but the General people liked it and that's the way I
started with General Cigar in 1963. By the way, I started with $85 a
week salary.

CA: But you kept your stores?

Boruchin: I did keep them. But I promised
myself that the moment my salary went over $120 a week, I would sell
the stores. I used to finish at 5 p.m. with General and run to my
stores. It was really stressful with the long working hours. But it
didn't take me too long to reach my goal, and I sold both stores.

CA: What year did you sell the stores?

Boruchin: '64.

CA: How long did you stay with General Cigar?

Boruchin: Until 1981, about 19 years.

CA: Were you successful at General?

Boruchin: I had a tough time at the
start. General had a lot of personnel, and I basically washed
floors. I was the guy that came last.

CA: You were the bottom of the totem pole?

Boruchin: My immediate boss harassed me all
the time. He didn't believe that I was making that many calls, and
doing such a good job. He actually told me that I was showing up
everybody, and maybe I should slow down. At first, he just didn't
believe me, and then he spent some time with me and realized I was
doing the job. What was happening was that the factory guy would go
home at 2 or 3 in the afternoon, and I, like a jerk, used to work
until 5 p.m. I finally had to go to Mr. Casten and complain to him
because I was being put in such a difficult situation. I was just
showing up the rest of the people. I told him the story and he got
very upset. He called a sales meeting and gave me a title--a special
projects supervisor. That meant I worked directly for him and didn't
answer to anybody else. He started using me in different parts of his
region, sending me to Georgia to work on certain accounts, and with
certain men.

CA: I would say he made you a troubleshooter.

Boruchin: Yes, but it was a huge break for
me. In a second, I was promoted over people who had worked with the
company a long time. It put me in a position where they were
practically working for me. It created a lot of jealousy.

CA: The Cullman family owned General Cigar at
that point, but it was mostly selling machine-made cigars. Is that
right?

Boruchin: Yes. After I came to the company,
General acquired Gradiaz Anniz, which owned the Gold Label brand. They
were experimenting in Jamaica, and some of those factories were making
the Macanudo brand there. The only popular brands at that time in my
area were Don Diego and Flamenco; they were made by the Menendez and
Garcia family in the Canary Island. They were the keys of the
high-grade market. I don't remember anything else at that time
competing with them.

CA: But it was basically a mass-brand,
machine-made business.

Boruchin: Yes. Things like Tiparillos, White
Owl, Robert Burns. Tiparillo came on very strong after the [U.S.]
surgeon general came out with his report about the problems with
cigarettes.

CA: How big was the Cuban cigar market in the
early 1960s?

Boruchin: After the embargo, it was pretty
small. There were some cigars left over, but when they ran out, you
couldn't get a Cuban cigar in the United States. It's not like today
that they are available practically all over. When they were closed
down, Montecruz, Don Diego and Flamenco became tremendously
popular. They were the high-grade cigars at that time, and they were
priced between 40 and 65 cents.

CA: When you left General Cigar in 1981, what
was your position?

Boruchin: Earlier I had been assistant
regional manager to Mr. Casten. I was his assistant already with
responsibilities in certain areas. He had much more territory and I
was in charge of quite a few states. Casten passed away at the age of
65 and General made me, I can't tell you what year, regional
manager. It was probably about 1974.

CA: So by that point, you had pretty much
reached the top?

Boruchin: It was one of the five or six bigger
positions in General because I think we were divided into five or six
regions.

CA: Was General Cigar's business growing even
though the market was shrinking?

Boruchin: I am proud to say that in my
territory, there were increases every year. When the Macanudo brand
came on the market [in the early 1970s], it was a tremendous
boost. The first year, year and a half, we had a tremendous fight, but
the Cullmans really are cigar people, and the effort and the
consistency of quality that they insisted on for Macanudo made it a
success.

CA: Was there a fight with the brands already
on the market?

Boruchin: Gulf & Western had acquired
Consolidated, so it was a fight between us and Don Diego.

CA: Don Diego was a Canary Island cigar at the
time. Was it the biggest competitor to Macanudo?

Boruchin: Yes, but Flamenco and Montecruz were
important, too. The big break for me was when Consolidated moved its
operations to the Dominican Republic. People didn't like the quality
and the product as much. Macanudo became really strong because the
quality was there. At that time, Macanudo [Rothschilds] sold
for 75 cents.

CA: Let's see, you've risen up the ranks of
General Cigar, you have a large territory in the United States, and
you decide in 1981 to get back into the retail business, which
is where you started. What caused you to go back to retail?

Boruchin: Mike [Mersel] was one of my
biggest customers in Florida. For a long time he had been telling me
that he wanted to retire. He was tired and he wanted me to buy the
store.

CA: Had Mike's store always been in that
location on Arthur Godfrey Road in Miami Beach?

Boruchin: Yes. Since 1950. It was one of the
biggest players in the South in the cigar business. As a matter of
fact, only Lew Rothman and Famous Cigars were bigger than Mike's. That
was true even though Mike's volume didn't reach $2 million a year in
1981. But he was one of my big customers and he kept telling me that I
could make more money working for him if we established a wholesale
operation. And working for General had its limitations. I was
traveling 40 weeks a year. I also knew that one day I wanted to have
my own business. I set my mind to creating the wholesale division. But
it wasn't easy. I was making decent money with General and I had all
kinds of assurances from them. But the decision was essentially made
when Mike called me one day and said that his lease would expire in
the summer. He had about eight or 10 months to go. He said, either I
come with him or he was going to liquidate the store.

CA: Did he want you to come work there, or to
buy it?

Boruchin: He gave me 33 percent of the company
to start. That still made me an employee, because the other 67
percent was owned by him and his brother. But my
relationship with Mike, even when he was my customer, was very
special. It was sort of a father and son relationship, and through the
years has developed into a very strong relationship. So, in 1981 I
started at Mike's.

CA: When you left General Cigar and went back
into the retail business, were there any problems because you left or
did they accept it?

Boruchin: I don't think they totally accepted
it. But the friendship was always there. My immediate boss at that
time was David Berg. David and I had an excellent relationship.
Now, Mike was also one of General's biggest customers. He had an
agreement with Morton Annis, even before General acquired Gradiaz
Anniz, where Mike got all the seconds. So Mike was a big customer. But
it was like General got an employee for free in me. My pride was the
introduction of Macanudo, and I felt very responsible for it even
though I was working at Mike's now.

CA: When did you buy the entire operation?

Boruchin: In 1985, I bought the whole company.

CA: When you started in 1981, what were the
total sales?

Boruchin: Less than $2 million a year.

CA: What were the sales in 1985?

Boruchin: In '85 we grew the business to about
$4 million.

CA: Does that mean that most of the growth was
in the wholesale business?

Boruchin: Yes. Don't forget Mike didn't carry
a full line [at retail] of merchandise from everybody. When I came in
with the wholesale operation, he was only carrying two or three sizes
of the Te-Amo. Then we added the whole line. He was only carrying two
or three sizes of Montecruz. We added the whole line. The only company
where Mike was carrying the whole line was General Cigar
merchandise. While he was adding all of this merchandise for wholesale
inventory, retail sales grew, too, in the different sizes.

CA: Did the retail business grow the same as
the wholesale side or did it contract?

Boruchin: Our retail business was growing in a
dying industry. A lot of retailers were going out of business. A lot
of small shops were closing. But we were discounters. We were a
consumer-oriented company. We were offering popular cigars at a
tremendous price.

CA: Where did most of your business come
from--residents of Miami Beach or tourists?

Boruchin: It was a combination. When I
arrived, Mike had discontinued his mail-order business, so most of the
business did come from the residents and tourists. In 1985, I started
the mail-order again. Luckily, he had kept his records, so the minute
I had full control of the company, I put out a letter which went to
maybe 4,000 or 5,000 names. I re-established the mail-order side. We
have been growing ever since. But other stores kept going out of
business. They couldn't afford the rent on the malls or
whatever. Maybe we were selling fewer cigars, but our share of the
market was growing.

CA: I remember when I visited Mike's in 1991,
the thing I loved about it the most was--forgive me for saying
this--but it was a dumpy, almost garage-like store that was loaded
with merchandise. Anyone who loves cigars would walk in there and
thought they died and went to heaven. It wasn't fancy. There was
nothing elegant about it, it was down and dirty. The counter cases
looked as if they had been there since 1950. Which cigars were selling
well then?

Boruchin: Te-Amo was always very strong, and
Montecruz and Don Diego were also very strong brands. All the national
brands were doing well. We also did a tremendous business in the
seconds of Macanudo and Partagas, which we had an exclusive on from
General Cigar.

CA: Did people know they were buying seconds
from Macanudo?

Boruchin: Yes, they did. We didn't necessarily
advertise it, but sometimes the sales staff would tell
people. Normally, we just said they were seconds of the best brands on
the market. People understood, because the sizes were identical and
the color of the wrapper was identical. But we were careful. We felt,
and General Cigar felt, that it might hurt the main brand.

CA: You have the three tiers of your
business--mail order, wholesale and retail. By 1995, what were the
total sales of your business?

Boruchin: Last year, we did about $11 million.

CA: What was it in 1992?

Boruchin: We did around $7 million in 1992.

CA: In 1996, what are you projecting now?

Boruchin: Over $22 million. We've doubled the
business.

CA: In one year?

Boruchin: In one year.

CA: Of the $22 million, how much is mail
order, wholesale and retail?

Boruchin: At one time, wholesale was 80
percent, 85 percent of my business. Today, it's 50 percent. The reason
in the change is that our retail business has increased so much that
no matter how much more the national companies have been giving us, we
don't have enough to wholesale it. We are selling directly to
consumers. The store is tremendous. The mail-order is tremendous. So,
wholesale and the retail side is about a 50-50 split.

CA: When you moved to your new store last
year, you were very nervous because you went from a little hole in the
wall to a good-sized store.

Boruchin: We went from 1,800 square feet to
16,500 square feet. And, instead of renting, we bought the building
for over a million and a half dollars.

CA: It sounds like you did the right thing.

Boruchin: God knows. The business was already
pointed in the right direction two years ago, though. And, it looked
like we couldn't continue on Arthur Godfrey Road. I was
convinced that I had to move in order to even maintain the business
that I was doing.

CA: It would seem that maybe the biggest
change from a retailer's or a wholesaler's point of view would be that
in the '80s you could get as much of any brand as you wanted, and
today you're dependent upon your relationships with the
manufacturers. Is that true?

Boruchin: Yes. But we were lucky. We were in a
position in the market when the Cigar Aficionado revolution came that
helped us cash in. We were probably the second-largest company in the
United States in the cigar business. We were in the right place at the
right time.

CA: Second to JR Tobacco.

Boruchin: Yes. By the way, we are very
friendly competitors and personal friends. He [Lew Rothman, owner of
JR Tobacco] is one of my largest suppliers of cigars.

CA: Many cigar lovers are frustrated about how
difficult it is to get their favorite cigars. They always ask, "How
long will it be before we can get the established brands?" What do you
think?

Boruchin: I think every manufacturer is making
tremendous investments, from growing tobacco to training cigar makers
to making more boxes. You know the shortage of boxes is one of the
biggest problems, even though it's not mentioned very often. I would
say that if the consumption continues to grow at this rate, [we may
never catch up]. If at one point, the growth does slow down,
the bigger manufacturers will catch up. I actually hope it never
happens, even though some people are frustrated. You know why?
There're a lot of great products on the market, and a lot of new
products are coming to the market. Some of them are great, and you can
still find good cigars. When I left my place in Miami, I had a good
supply of almost every major brand. That doesn't mean that two weeks
from now we might not be out of everything.

CA: You haven't been able to build up
inventories?

Boruchin: Not on the major brands.

CA: Have you ever been able to keep large
inventories for an extended period?

Boruchin: Not really. We always turned over
stock, even though we keep a large inventory because of the nature of
our business. But we kept reordering practically every week. The
merchandise used to be available. What is not available anymore is
deals. Everybody used to wheel and deal at that time to compete. And
merchandise could be bought cheaper. It's been one of our main
concerns because we were always consumer-oriented. But we are a
consumer company and we were always trying to give the consumer the
best deal available. It's been tougher now. We are not able to offer
the consumer the same business that we did before. Merchandise is so
short. It's impossible to get the deals that we used to get before.

CA: Let's change the subject. You are
Cuban-American, living in Miami and in the cigar business. Doesn't
that put you at the center of a hurricane?

Boruchin: Definitely. When you live in south
Florida and you have a million Cubans, the subject of Cuba is
unavoidable. It's subsiding a little now. The conservatism of the
Cubans of 10, 15 years ago is not that much anymore. For me, a Cuban
cigar is the best cigar in the world. I don't care who gets mad. But I
don't sell them, and I fight anyone who does because today, Cuban
cigars are my biggest competitor. I'm located in an area where most of
my customers are affluent people. They all have access to Cuban
cigars. Sometimes they are counterfeit, because the popularity of the
Cuban cigar has brought counterfeits into the picture. But whether
they are real or counterfeits, I'm losing a tremendous amount of
revenue because these people would be smoking the cigars I
sell. Still, I am not that crazy to say or that ignorant to say that
it is not the best cigar in the world.

CA: Have you noticed any change in attitude in
the old guard about what the community's relationship should be with
Cuba?

Boruchin: Because of the children, who have
been born post-1960 and raised here, the thinking today is much more
realistic. I'm not saying that the Cubans here like Castro. He's been
in power for over 30 years and there's still no freedom in Cuba. Fidel
knows that. He's been told by everybody. So the thinking about the
government of Cuba is probably the same. But the feeling, people to
people, is different. The people who live there don't have a choice to
elect the government. But they're Cubans. The Cubans who live in Cuba
and who live in Miami are the same. It's just a geographical
situation. My feeling is that there won't be a revolution in
Cuba. Everybody knows that. I don't care how conservative a Cuban is
here in Miami, he knows Castro isn't going to come down by force. So
the thing is to come to a political solution. Maybe it will be created
by the Pope coming to Cuba. One thing we know is that people want to
live better. If the embargo didn't exist and the relationship between
Cuba and the United States were more normal, I think Cubans would have
it easier creating a more democratic society. The isolation makes it
harder.

CA: When I speak to people in the cigar trade,
they all seem to hope that they can return home to Cuba someday. Do
you feel there's been enough interest on the part of Cuban-Americans
to help their countrymen, or is the focus on making the embargo
stronger really hurting the people left in Cuba?

Boruchin: It hasn't worked. At one time they
felt that it would work. Some people still feel that way. But not the
younger people. You can see it in the last elections. For a Democrat
to obtain more than 5 percent of the Cuban vote in Miami used to be
unheard of. However, Clinton got 30 or 35 percent of that vote. I
think a lot of people have changed their minds.

CA: But many Cuban-Americans still have
relatives back in Cuba. They know that these people are deprived of
basic necessities, which means the basic welfare of the people keeps
declining. To me, it seems they have been so preoccupied with getting
Castro out, that they've forgotten the people.

Boruchin: It's true, to a point. But,
individually, you would be dumbfounded to find how many millions of
dollars have been sent to immediate relatives. It's been food,
medicine and even money. Even though it's technically prohibited this
year, there is a tremendous amount of goods flowing through Canada,
Mexico, the Bahamas, the Dominican Republic. It's a tremendous
business and it's a tremendous amount of money. It's just not a
policy.

CA: When do you think the embargo will be
lifted?

Boruchin: I thought that if Castro didn't make
that mistake of bringing those planes down [in February 1996],
Clinton would have lifted the embargo before the elections. I
think he had more to gain in votes than to lose. Many of those votes
in Florida, he wasn't going to get anyway. But he is under tremendous
pressure by the industry in this country, by the business community,
that see Italians, Spaniards, Canadians and Englishmen who are doing a
tremendous amount of business with Cuba. We are so close to the island
and we can do business with Cuba.

CA: Is it a year away, two years away, five
years away?

Boruchin: I think before Clinton leaves, he
will lift the embargo.

CA: If the embargo is lifted...

Boruchin: I'll be in Cuba on the first plane.

CA: How will that affect the cigar market in
America?

Boruchin: It would be tremendous for the cigar
market. At one time, the only thing that we thought was going to help
the cigar industry was the lifting of the embargo and the Cuban cigars
coming into the market. Now, we have this tremendous boom, and we
still have the day ahead when Cuban cigars will come into the United
States. I think it would help. I think that the news media, the
papers, the advertising, the charisma that is going to come in the
market, together with the cigars, is going to be tremendous. Don't
forget. These Cuban cigars will be at a different price level. Not
everybody can afford to smoke these cigars. But a lot of people are
going to try them in the beginning, and the cigars will find their
niche. They'll find their niche with certain consumers. It still is
not going to hurt the industry. If anything it is going to help.

CA: In your judgment, do you think the boom in
cigar sales is a fad? And if so, why? And if not, why not?

Boruchin: I don't think it's a fad. I don't
spend as much time on the floor taking care of customers like I used
to. But the little time I spend in the store, I see these young
people, 25 to 30, coming in. I see it in my family. We have a large
family. I have maybe six cousins that had children. The children are
all young professionals. I don't think there's one of them that
doesn't own an Elie Bleu humidor. Whether they smoke two cigars a week
or three cigars a week, they like to smoke cigars. If you look at a
guy who is 23, 25 and is smoking and is crazy about it, even if we
lose a percentage of them, you have somebody there that has 50, 60
years of smoking ahead of them. I won't see the end of this in my
lifetime. Of course, everything in life reaches a ceiling. This won't
be an exception. But the cigar business is going to be a tremendous
business for a long time to come. I only see one danger. That's
government restrictions. Before, nobody cared, but as we grow, as the
industry grows, our enemies are going to grow. So, we are going
to have to face in the near future a barrage of tremendous bad
publicity.

CA: Hasn't that already started?

Boruchin: Yes.

CA: There's so much disinformation about
cigars; using cigarette studies to compare smoking habits of cigar
smokers is one popular example. How should we fight it?

Boruchin: There's one thing they can't
fight. I smoke about 10 or 12 cigars a week. I could go a month
without smoking, without any problem. Cigars are not addictive. Nobody
can say: "I can't live without cigars." You can be three days without
smoking. You can pick up a cigar three days from now and smoke. So,
the addiction that they criticize for cigarettes doesn't exist with
cigars. And nobody inhales cigars; if they do it's a very small
percentage. The danger of getting sick from cigar smoking is very
small. They are going to have a tough time convincing the intelligent
consumer of today who smokes in moderation.

CA: Do you feel that the proliferation of all
the new brands on the market, some of which are not very well made or
quality cigars, presents a potential problem for the industry?

Boruchin: Yes, even though I think this phase
will pass. For example, look at the explosion in new tobacco
stores. There're not enough cigars to go around for them. A lot of the
cigars are just maybe being spread too thin. And some of those new
cigars are coming in at extravagant prices. But if you look at the
national brands--H. Upmann, Don Diego, Macanudo, Partagas, Bauza,
Licenciados, Astral, the regular brands--they are still selling for
below $5. Now you get a new cigar maker that bought tobacco last week,
stole three cigar rollers and makes a cigar trying to sell it for $8
and $10. They are just ripping off the public. That's going to
disappear.

CA: How would you describe, or how would you
rate, the quality of these new brands?

Boruchin: Some of them are great. Some of them
are garbage. Some of them are garbage in, garbage out, because they
don't get the right tobacco, they don't get the right cigar makers,
but they still come in to make a killing. This is not the people like
us. Many people in the cigar business have been in it for 50
years. But these others just come in to get rich quick. Either they
are going to try to go into the stock market and make a killing in the
stock market or they are going to try to sell bad product. There is a
scarcity of good product in the stores, which allows these newcomers
to come in. These retailers need merchandise to sell. Eventually
people will realize they are paying a tremendous amount of money for
cigars that aren't worth it.

CA: You mentioned the problem with counterfeit
Cubans. Is that a new phenomenon?

Boruchin: That never happened five years
ago. This is happening since the Cuban cigars have become very
popular, together with the cigar industry. Everybody sees it as an
opportunity to make money.

CA: In terms of the counterfeit cigars in
Miami, are they made in Cuba or are they knock-offs from other
countries?

Boruchin: Some come from Cuba. They've been
bought on the street there. But the majority are made in the Dominican
Republic and Honduras.

CA: And the consumer doesn't know?

Boruchin: Don't forget that most of the young
smokers have not been exposed to many Cuban cigars. They buy a box of
Cohibas and they smoke a product that is not that great, but they
really don't identify it that well. Like maybe you or I could identify
it as a fake.

CA: Then they say a Cuban cigar is not so
good.

Boruchin: But they like to go around with the
band on. What they are trying to do is impress people with the fact
they are smoking a Cohiba. Taste means very little. It's just showing
off to their friends on Saturday night that they are smoking a
Cohiba. They choose by the band.

CA: I get asked all the time by people to tell
them whether the cigars are real or not. One guy swore his came from
Cuba, and I asked him if they'd been bought in a store and he said,
no, right out front. I knew immediately they were fakes. It seems the
problem is out of control.

Boruchin: Every other Cuban cigar sold in
Miami today is counterfeit. Especially the Cohiba and Montecristo
labels. Those are the ones that you see the most. I haven't seen a
counterfeit Bolivar, or some of the other brands that are not that
popular. I have heard stories of customers of mine that have been
hustled by clerks in stores in Cuba, like, "Why do you want to pay
$250 [per box] for this cigar? I can get it to you for $70, $80
tonight, if you meet me at such and such a place." Because it's a
store clerk offering this deal, people think they must be
stolen from the store and are real. But that's not the case. The
Cubans are very ingenious. They always were and that's the reason that
they're so successful in exile. How they manage to counterfeit the
boxes and the bands--this is something unbelievable.

CA: You have three brands today. Can you tell
us the origin of the brands?

Boruchin: The 8-9-8 Collection came about as a
result of a [1991] deal with General Cigar. We were going to do
something in the Dominican Republic. They wanted to make a good
high-grade cigar for us in Jamaica. Today, because of the raw material
problems, we will get about 300,000 8-9-8 cigars.

CA: You own that brand?

Boruchin: I own that brand, and it is selling
tremendously. We have taken orders [at the August '96 Retail Tobacco
Dealers Convention] in Cincinnati for delivery in '97. Even though we
are going to deliver 300,000 cigars, you know that is not enough. And,
it is a very expensive cigar.

CA: What's the price range of 8-9-8?

Boruchin: Between $6 and $9. We also own the
brand, Licenciados, which I started to make with MATASA and Manuel
Quesada in 1987. I wanted a mild cigar because the market favored mild
cigars at the time. I was smoking Diplomaticos that I used to get in
the Bahamas. And I loved the look of the box and it occurred to me
that it wasn't registered. I tried to register the brand, but I ran
into problems with the name. But I had no problems with the design. In
order to expedite the introduction, we came out with the name
Licenciados, which means attorney in [Spanish]. We had some second
thoughts because the name was so hard to pronounce in the American
market. But then we got a 93 from Cigar Aficionado [in 1994], and the
brand became extremely popular; the pronunciation didn't matter.

CA: They could pronounce Toro. [Laughter]
[Toro is the name of the Licenciados corona gorda that received the
93.]

Boruchin: They could pronounce Toro with the
93. The problem was essentially a very recent problem. We were great
in the late '80s, over 200,000 cigars a year. We had 40 or 50 good
friends that we had in the cigar business that were helping me with
the brand and the brand was a viable brand.

CA: So you created the name?

Boruchin: I created the name. And Mr. Quesada
and myself created the brand. We were trying to copy a blend similar
to Macanudo. I don't mind telling you. Macanudo was extremely popular
and we felt that if we came out with a product mild like this, we
would have an edge.

CA: With Licenciados, because it was not a
brand of Cuban origin, you can sell that brand all over the world.

Boruchin: The brand, yes. I don't think I can
use the design outside the United States, because Cuba makes
Diplomaticos with the design.

CA: What is the sales volume for Licenciados?

Boruchin: In 1996, we will have put out
in the market a little over one million cigars. We could sell more if
we could get them.

CA: What about Bauza?

Boruchin: Bauza is the love of my life. That
was the first cigar I smoked. It's a very old Cuban brand and it's
probably one of the most popular Cuban brands that wasn't made for
export. It was smoked by Cubans on the island. The brand Bauza is
owned by the Arturo Fuente family. I acquired the distribution rights
to the brand when I purchased a small jobber that represented the
Fuentes in the Miami area.

CA: You acquired the rights to sell the brand?

Boruchin: I have the rights to sell the brand
in the United States. It's a tremendous brand. I know that Carlos
Fuente Sr. and Carlos Jr. are in love with the brand. The plans for
the brand in the future are tremendous.

CA: The Fuentes produce the brand?

Boruchin: Yes, they make the brand. When I
acquired the rights for the brand, we were selling maybe 40,000 or
50,000 cigars in the United States, but they were mainly concentrated
in the Cuban area in Miami. But they weren't making any money because
the Cubans in Miami only buy very inexpensive cigars. So, we went
national with the brand.

CA: What year was this?

Boruchin: It was 1990 when we acquired this
company together with this brand. We also had the rights to sell the
brand Moya, which is also a very old Cuban brand and also owned by the
Fuente family. Moya was not as popular [as Bauza]. We
had plans a few years ago before the cigar revolution--we were going
to make a line of short-filler cigars with this name. But the Fuentes,
of course, are so tied up in work right now that we have delayed the
Moya project. We feel very strongly that in the near future Bauza is
going to become a bigger brand.

CA: Between MATASA for Licenciados and
A. Fuente for Bauza, what kind of production increases do you think
you'll get in 1997, '98 and '99?

Boruchin: I feel strongly that we can grow at
a rate of 25 to 30 percent a year in the next few years. It depends on
the effort of MATASA and Fuente to expand their production
capacity. And it depends on what happens with the demand of the other
products. Don't forget that the Fuentes are the most sought-after
cigar. The Fuente Fuente Opus X is today probably the most in-demand
cigar in America. The Arturo Fuente brand is so popular that no matter
how many cigars you get, they sell out within two to three days. They
have a long way to go, but the effort being done to catch up is
tremendous. I feel pretty optimistic about the future when it comes to
getting more products from them.

CA: Is your family in the business now?

Boruchin: Yes. I have my son-in-law [Oded
Ben-arie] in the business. He is second in command. He does a
tremendous job. I am not there as much as I used to be. A friend of
mine makes a Big Smoke every month. I'm absent three, four days a
month just for that, and for trips to the Dominican Republic and
Honduras. So, I'm away and he's always there and he runs the business
now.

CA: Is Mike still in business?

Boruchin: Mike is still in the business.

CA: How old is he today?

Boruchin: Mike was born 1/11/11, so, he is
86. At one point, when he sold us the business, he retired. He came
back about six months later; he asked me if he could come back to work
a few hours a day, and, of course, for me it was a blessing. He
watches my back. As long as Mike is there, nobody is going to stab me
in the back. He's like a bodyguard always. Today, he puts in eight,
nine, 10 hours a day.

CA: Why is it that whenever I go there, he
gives me white gym socks?

Boruchin: You know Mike started out on Orchard
Street in New York and he had a pushcart, and he was always there
selling socks. He always says that he blesses the memory of [then-New
York City Mayor Fiorello] La Guardia, because La Guardia kicked him
out of Orchard Street with the pushcart and he had to move to
Florida. And he started the cigar business. So, the love of his life
has always been socks. So as not to forget that, he keeps a little
stock of socks in his desk and everybody that he likes that comes to
the store walks out with a pair of socks.

CA: Your store is one of the most beautiful
stores in America. Do you have any plans to expand that one store or
to add other stores? Either in Florida or elsewhere?

Boruchin: We have 6,500 square feet of retail
store. The retail area is adequate. And even if we pile up more stuff
in the store, it is adequate. Where we run out of space is in the
warehouse, the wholesale and other department operations. We are
looking into expanding that area. We are looking within the
neighborhood where we are located right now. I have no plans to expand
the store. We walk a thin line between being manufacturer, distributor
and retailer. If I open up a lot of my cigar stores around the
country, I would be competing with my friends. We are not planning to
enlarge the retail operation.

CA: What do today's smokers buy? What are they
smoking? What are the cigars that are in big demand in terms of
flavor, strength, size, color, origin? What is the cigar that is in
greatest demand?

Boruchin: The trend today is toward a strong
cigar. Size favorites are robustos, a 4 1/2 or 5 [inch] x 50
ring gauge or a 5 1/2 x 50 ring gauge. On many occasions, you can't
smoke a large cigar unless you find a friendly place or in your
house. Most of the places you want a shorter smoke because you want to
finish and you don't want to throw it away. When a new smoker walks
in, the preference is for a mild cigar. But he graduates to a medium
to strong cigar very quickly. I see them come in the first day and buy
cigars. But then you see them a month later and they already are
looking at a little stronger cigar, such as a Partagas, a Fuente, a
Bauza. At the beginning, they all feel they want to start with a mild
cigar. But it is surprising how they move pretty quickly to a strong
smoke.

CA: How much do they want to spend on a cigar?

Boruchin: Price is no object. When you see
that some of the retailers come to my place and pay full price and
then go out to sell it at a tremendous profit, it means people are
going in those places and buying cigars for $10, $9, $8 apiece. I
think availability is the main issue today. If you have the product,
you have no problem charging whatever you want.

CA: In south Florida, are there today many
places where you can go and enjoy a nice meal and have a cigar
afterwards? Or are there still a lot of problems in terms of having a
place to eat and then smoke?

Boruchin: You still have a lot of
problems. There're not too many places that you can go openly and
light up a cigar where you're sitting. They allow you to smoke in the
bar, in many cases. But, a lot of clubs are opening up, even though I
don't count clubs. I like restaurants, where you can sit down and
enjoy a cigar. One of them is The Forge, especially since they opened
up the Cuba Club next door. But they keep humidors with cigars in both
places. And you can light up a cigar any place in The Forge. It might
be another half dozen restaurants like that. But that's all.

CA: Do you see any local legislation coming
along to restrict cigar smoking in south Florida?

Boruchin: They have tried. But Florida is a
big producer of cigars, and we've been able to stop those efforts
before. However, I won't be surprised if it will happen in the
future. Not too long ago [the state] tried to pass a tax on
cigars and it was defeated. They just passed a tax on tobacco, but
they never touch the cigars. In Tampa and Miami, a lot of people still
make a living in the industry.

CA: You once told me a story about the brand
name Cohiba and the trademark. Could you tell it again?

Boruchin: In the '70s, a friend of mine,
Bernardo Benes, was retained by the Carter Administration. Bernardo
had been a friend of Fidel in Havana University and at the beginning
of the Revolution, he was a subsecretary in the Treasury
Department. He left Cuba because of ideological differences. But he is
not a conservative Cuban. He worked closely with Claude Pepper when he
was a congressman, and he was on retainer with the State Department
during the Carter Administration. He used to go and see Castro often,
always on different missions that didn't really come out in the
press. One time he came back from Cuba and he gave me a little pack
with four or five lanceros. And he told me these are cigars that Fidel
smokes that he gives to people that visit with him. The cigar is not a
commercial brand. At that time, they didn't ever dream that they were
going to make it commercial. I was working for General Cigar at that
time and, loyal employee that I was, I sent the bands and a couple of
cigars to Edgar Cullman Jr. And I told the Cullmans the story that I
just told you. And General went ahead and registered the brand. And
sure enough, nobody had an intent to register it then because the
brand wasn't even commercially available. So, General Cigar owns the
brand in the United States.

CA: You've been in the cigar trade for 36
years. Do you ever look in the mirror and pinch yourself?

Boruchin: Yes. But, I can't tell you the
number of times that I considered leaving the business. The only
problem with cigars is that it gets into your skin. The cigar
business, you just couldn't leave it. You get to love the business so
much and the people in the business. I bet you that there's not
another industry that has the friendships that I have. I say that
because lately, like any industry that grows so much, it creates
jealousies and creates competition. But I remember at one time that we
all sat down and talked about our mutual business--it was like a big
family. It still is. And, I'm very glad I didn't leave, because the
last four or five years have been very rewarding.

CA: I think I know what you are talking
about. Many of the new people have come into the business to exploit
it, as opposed to because they love cigars or they have a family
history in the business. They would probably leave it if it stopped
growing. Many are only in it for the money. They are not in it for the
emotional bond that many of the people that have been in it their
whole lives are in it for.

Boruchin: It's a funny thing. We have a
community. It's like an association of the people who've been in this
business a long time, and we look out for each other. I don't mind
telling you openly, when it comes to distributing my cigars, which are
so short in supply, I never forget the people that helped me whenthis
craziness wasn't around. My supplies go to those 100 or 150 stores
that weathered the storm. You will never find one of the old guys
without cigars as long as I am around. I will take care of the people
that have been around a long time. This is my philosophy.